The Canadian dollar strengthened to its highest level in three week against the US dollar, outperforming most of the major currencies after both Canadian and U.S. economic data were released today, with better than forecast results.
Canada released its manufacturing sales data, which recorded gains for a second straight month in August, at nearly three times the pace as expected, as large aerospace production outweighed a decline in the auto sector.
Meanwhile, Canada’s major trading partner south of the border released surprisingly positive retail sales data. Sales at US retailers rebounded in September at their fastest pace in seven months as consumers shook off some of their concerns about stock market slides and political gridlock, potentially giving new momentum to the weak economic recovery.
The data created a sense of optimism which helped lift risky and commodity price-sensitive currencies like the Canadian dollar. Risk appetite also improved today on hopes of progress towards a solution to the euro zone’s debt crisis later this month. The Canadian dollar as high as C$1.0111 to the U.S. dollar, or 98.90 U.S. cents, from around C$1.0138, or 98.64 U.S. cents, immediately before the reports.